Employers in U.S. Announce Most Job Cuts in Eight Months

People check the jobs board at a Denver Workforce Center in Denver, Colorado. Photographer: Matthew Staver/Bloomberg

Dec. 1 (Bloomberg) -- Employers in the U.S. announced plans
in November to cut 48,711 jobs, the most in eight months, as
government agencies trimmed payrolls.

Compared with the same month last year, planned firings
dropped 3.3 percent, according to Chicago-based Challenger, Gray
& Christmas Inc. This month’s downsizing marks the smallest
year-over-year decline since May 2009 when job cuts increased by
7.4 percent from a year earlier.

While some companies are putting fewer workers on
unemployment lines, others have yet to add jobs fast enough to
bring down unemployment, which is close to a 26-year high.
Budget woes that have prompted state and local governments to
cut staff may spur similar decisions at the federal level after
President Barack Obama’s deficit-cutting commission proposed a
10 percent reduction in the workforce.

“Job cuts that have been concentrated at the state and
local level could expand to include federal workers in the new
year,” John A. Challenger, chief executive officer of
Challenger, Gray & Christmas, said in a statement. “Other
sectors have seen significant declines in job cuts this year
and, at the moment, there is little evidence of a possible
resurgence in 2011.”

Government Agencies

Government and non-profit agencies led the November job
cuts with 10,761 announced reductions, the seventh time this
year it’s led all industries, according to Challenger. Consumer-product companies reported the next-largest number of cuts, with
8,748.

Ohio led all states with 10,353 announced job cuts,
followed by New York, with 8,045.

Today’s report also showed that employers announced plans
in November to hire 26,012 workers, down from 124,766 the prior
month. Retail businesses led the gains, planning to add 15,900
workers.

A report from the Labor Department later this week may show
companies added 155,000 jobs in November, according to the
median forecast in a Bloomberg News survey of economists. The
jobless rate probably held at 9.6 percent, the survey showed.

Federal Reserve policy makers remain concerned the economy
isn’t growing fast enough to bring down unemployment. Economists
forecast joblessness will exceed 9 percent through next year,
according to a Bloomberg survey earlier last month. Central
bankers in November announced they will inject another $600
billion into the financial system by June to help spur the
recovery.

Governments This Year

Government and non-profit agencies have announced plans to
let go of 138,979 workers this year, which is 177 percent more
than the 50,168 firings by the pharmaceutical industry, the next
biggest job cutter, according to Challenger.

Obama earlier this week proposed freezing the pay of about
2 million federal workers this fiscal year and next as a step
toward reining in the budget deficit. The president’s deficit-cutting commission, which proposes reducing the government
workforce, will vote Dec. 3 on whether to send a plan to
Congress.

Staff reductions are expected at state and local government
agencies. New York City, facing a $3.3 billion deficit in next
year’s budget, will cut its workforce by more than 10,000 over
the next year-and-a-half, Mayor Michael Bloomberg’s budget
office said Nov. 18. More than 6,200 workers will be fired, and
the remainder of the cuts will be made through attrition, his
office said.

The mayor is founder and majority owner of Bloomberg News
parent Bloomberg LP.

Challenger’s data do not always correlate with figures on
payrolls or first-time jobless claims as reported by the
government. Many job cuts are carried out through attrition or
early retirement. Some employees whose jobs are eliminated find
work elsewhere in their companies and many announced staff
reductions never take place because business improves. The
totals also include foreign affiliates.